S&P downgrades Argentina to 'selective default'

Rating agency Standard & Poor's has officially downgraded Argentina's sovereign debt grade to the category of selective default, while negotiations to pay bondholders broke down in New York today.

Ahead of the announcement that talks had ended without progress, S&P revised the rating from CCC- due to the fact that, even if an agreement had been reached today between the country and holdout investors, the deal would come too late to turn payment over to those creditors who entered restructuring efforts before the deadline that expires this evening.

A total of 539 million dollars to pay interest on the Discount bond are currently deposited with the Bank of New York, but a ruling from New York judge Thomas Griesa banning payment to restructured bondholders before the 'vulture funds' means that the financial entity has been unable to send the funds to creditors.